Will Russia's March into Ukraine Trample Russian Indium Exports?

March 4th, 2014

Russia produces refined Indium mainly through two companies, Chelyabinsk Zinc Plant OJSC and Ural Mining and
Metals Co, with capacity estimated to be 10,000 to 15,000 kg per year. The majority of this indium is exported.

In Brussels, NATO allies huddled in emergency talks requested by Poland, which considers itself to be under threat by the drama in neighboring Ukraine. NATO spokeswoman Oana Lungescu said the allies were united in solidarity with Poland. “Obviously, this is a crisis which is very serious. It has an impact, not just on Ukraine, and Ukraine’s sovereignty and territorial integrity, but also on instability in the whole region,” she said.

Anxieties have been heightened by a confrontation between Ukrainian soldiers and Russian forces at Belbek Air Base, near Sevastopol. Russian forces are seen firing shots into the air, warning unarmed Ukrainian soldiers from approaching them.

U.S. President Barack Obama said the United States is examining a series of economic and diplomatic steps to “isolate Russia.”

The standoff has had a significant effect in global markets, pushing up the price of oil. Russia is a key exporter of oil and natural gas.

Rising tension over Ukraine slammed Russian financial markets Monday, prompting the central bank to hike interest rates as the ruble plunged. The ruble, already one of the weakest currencies so far this year, fell as much as 3% versus the U.S. dollar before posting a small recovery. Russia’s main stock market index fell nearly 13% as the country’s G8 partners condemned its military buildup in Crimea, demanding that it withdraw. Russia’s central bank reacted to the volatility by hiking interest rates to 7% from 5.5%, saying it aimed to maintain financial stability and inflation levels.

“Open military action against Ukraine would have major political and economic costs for Russia itself,” noted analysts at Bank of America Merrill Lynch. “Direct costs of war to Russia could reach at least 3% of GDP.”